The Impact Of Tax Cheats

The Internal Revenue Service estimates that, each year, about 16.3 percent of the nation’s federal taxes go unpaid — and that’s after the IRS takes whatever action it takes to try to achieve compliance.  This “compliance gap” leaves a pretty big hole in the federal budget.  In 2018, if all of the federal taxes that were owed were actually paid, it would have meant another $643 billion in revenue for the federal goverment — which would have covered about 83 percent of our ridiculously large federal budget deficit.

celebrity_tax_cheats-624x300Why don’t people just suck it up and pay what they owe?  That’s not a self-answering question.  The Government Accountability Office says there are three main reasons for non-compliance:  third-party reporting issues, reduced IRS budgets and staffing, and the complexity of the Internal Revenue Code.  The first and third reasons involve mistakes — where third parties don’t correctly report what a taxpayer has earned, or has received in a taxable transaction, or where a taxpayer has legitimately tried to figure out what they owe, and simply been wrong — but the second category clearly relates to the ability of the IRS to ferret out, audit, and penalize those who are knowingly cheating.  In short, if you had perfect compliance, reduced IRS budgets and staffing wouldn’t make a difference.  And the lines between the three categories may be blurry, too.  If a taxpayer professes confusion about how to treat a particular source of income but adopts a stretched reading that dramatically minimizes their taxes, is that cheating, or a product of tax code complexity?

So, what can we do to improve the compliance numbers, recognizing that getting perfect, 100 percent compliance is an unattainable goal?  The answer to that question seems to turn on political inclinations and your view of human nature.  Some people, like the author of the article linked above, think that simplifying the tax code would result in a higher compliance rate — an argument that presupposes that people honestly try to figure out, and pay, what they actually owe.  The flip side argues that increasing the IRS budget for oversight and compliance is the best way to promote compliance.  In short, if more people fear they’re going to get caught, it will have a prophylactic impact on a wider group of taxpayers who will choose to simply pay their taxes rather than risk audits and penalties.

There’s undoubtedly merit in both arguments, although being somewhat cynical about human nature, I tend to agree more with the latter camp — but it’s also true that neither of these solutions has much promise in the short term.  Tax simplification has been the Great White Whale of politics for as long as I’ve been filling out 1040 forms, and it never quite happens.  And campaigning for office on a platform of increased IRS funding and more aggressive tax enforcement doesn’t seem like the ticket to political success.

So we’re likely to bump along as we have been, with many people accepting their federal tax burdens, a segment of the population consciously cheating on their tax obligations, and a continually growing deficit because we can’t actually do something about the “compliance gap.”  It makes you wonder:  at some point, is that “compliance gap” going to grow even larger?

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Deepfaking Mona Lisa

These days, it’s hard to tell the real from the fake.  You never know if a quote, or a photo, or a Facebook meme is truthful or manufactured as part of some scheme or for some deep political purpose.  Video footage seems more reliable, but we’ve all seen examples of how careful editing can change the context and the perception.

mona-lisa-1883925Now, it’s going to get even harder to distinguish the real from the fake.  The development of artificial intelligence programming and facial recognition software is allowing for the development of increasingly realistic, seemingly authentic video footage that is in fact totally fictional.  The new word to describe the result is “deepfake,” which refers to the use of AI technology to produce or alter video to present something that didn’t occur in reality.  And the use of rapidly improving technology to produce deepfake video is erasing boundaries that used to allow humans to spot video frauds by focusing in on gestures, subtle facial movements, and other “real” human behavior that computers just couldn’t effectively simulate.  The avatars in even the most advanced video games still look like, well, avatars.

But that is all changing.  A team of engineers from the Samsung AI Center and the Skolkovo Institute of Science and Technology in Moscow has developed new algorithms that are far more advanced and successful in replicating realistic human faces.  The software is the product of studies of thousands of videos of celebrities and ordinary people talking to cameras.  It focuses in on “landmark” facial features and uses a neural network to convert the landmark features into convincing moving video.  The new software also self-edits by critically scanning the individual video frames that are produced, culling out those that seem unnatural, and substituting improved frames.

As a result of all of this, the new software can produce realistic video from a single, static image.  Take a look at the video of a chatty Mona Lisa embedded in this article, created from the application of the new software to the single image in the famous portrait by Leonardo da Vinci, and then tell yourself that it doesn’t look astonishingly, and disturbingly, realistic.  If Mona Lisa can talk, it sure seems like we’ve crossed a new boundary in the ongoing battle of real versus fake.

Like any new technology, the AI that allows for the creation of realistic video footage from a single image could have positive applications, and negative applications.  It’s just hard not to focus on the negative possibilities in the current era of fakery and fraud, and wonder how this new technology might be used for political dirty tricks or other chicanery.  We’re all just going to have to be increasingly skeptical about what is real, and what is false and realize that passing the “eye test” might not be much of a test any more.

Wake Me When It’s 2020

I’m capable of paying attention to a finite number of things at any given point in time.  And right now, the 2020 presidential race is not even close to making that list.

scottball_beto-orourke_alamo-music-hall_campaign_election_senate_11-4-2018-5-1170x782I see stories like this one — “Beto O’Rourke plans ‘reintroduction’ as 2020 buzz fizzles” — or this one — “Florida takes shape as Joe Biden’s firewall” — and I happily skip over them without a second thought or a guilty conscience.  And it’s not just stories about “Beto” or “Joe” I’m not reading:  I’ll also gladly pass on stories about how “Mayor Pete” is being received by big-money donors in Hollywood, or whether Amy Klobuchar’s campaign is gaining any traction, or how Bernie Sanders is doing in tracking polls in New Hampshire.  I’m not going to read any stories about how any of the candidates are doing on fundraising, or whether they are lining up “super-delegates,” or any inside baseball/horse race analysis pieces, either.

There are people who are political junkies, and I’m not one of them.  At this point, the 2020 election is so far away, and there are so many Democratic candidates vying for the nomination, that I really can’t spend time analyzing their positions or trying to figure out their qualifications or capabilities.  With the number of officially declared Democratic candidates at around two dozen, trying to do any meaningful candidate-by-candidate evaluation is an overwhelming task.  So at this point, I’m fine with allowing the political junkies to carry the ball and do whatever they do to let the field be winnowed down to a manageable number.  Whether the winnowing occurs because of fizzled “buzz,” fundraising efforts, or tracking polls, or super-delegates, I don’t care — just don’t expect me to pay any attention until we’ve got a narrower field that consists of people who might actually have a reasonable chance to win the nomination.

In short, wake me when it’s 2020.

Oakland’s “Pothole Vigilantes”

Oakland, California is in the midst of some tough financial times.  The city is facing a $25 million operating deficit this year, and providing all of the basic services that those of us living in better-managed cities take for granted — like parks, street lights, and adequately maintained roads — just aren’t within Oakland’s current budgetary capabilities.

potholevigilantesRight now, Oakland has 7,700 unaddressed service requests to fix potholes on Oakland city streets.  The quality of streets in Oakland has been found by a recent study to be among the worst in the country, with bone-jarring potholes and other street-quality issues estimated to cost Oakland drivers an extra $1,000 a year in car repair and maintenance costs.  And to add insult to injury for hapless Oakland drivers, Oakland officials have decided that $2.9 million in money that has been generated by California’s high state gas taxes — money that is supposed to be used for road repair — will be used for street lights and parks instead.  Rather than providing some immediate pothole relief with the money earmarked for that purpose, Oakland is promising that it will move forward with a project to spend $100 million on street repairs over the next three years.

So what’s a frustrated Oakland driver who is tired of having to pay hundreds of dollars in car repair costs out of pocket because city fathers aren’t providing basic services to do?  Two Oakland residents have decided to take matters into their own hands.  They call themselves the “Pothole Vigilantes,” and at night they’ve gone out to tackle potholes in certain Oakland neighborhoods.  After they’ve made their repairs, they post videos of their work on Instagram, where they also solicit suggestions for new pothole projects, and donations.

Oakland city administrators asked about the work of the “Pothole Vigilantes” say that they sympathize with the frustration about unrepaired potholes, but they “can’t recommend anyone do this work themselves, not least because it raises safety issues while people are working in the streets.”  No kidding!  People pay taxes so their cities will do the work in a way that is safe, planned, and handled by people who know what they’re doing — but if cities fail to deliver on basic services, they shouldn’t be surprised that some people will take matters into their own hands.

If you had to drive every day on a street with a monster chuckhole that was never fixed and growing ever larger, wouldn’t you be tempted to try to fix it yourself?  And while the safety issues involved in citizens going out to do road repair under cover of darkness are obvious, there’s also something admirable about people who aren’t content to sit back and wait forever for an inept city government and its budgetary shell game to complete repairs, and instead have decided that some self-help is in order.  Don’t blame the fed-up “Pothole Vigilantes,” blame the city government whose failures produced the conditions that gave rise to their vigilantism in the first place.

The Perils Of “Dutch Uncle” Advice

A “Dutch uncle” is somebody who doesn’t sugarcoat things.  When you get “Dutch uncle” advice, you’re getting a firm expression of a person’s unvarnished, straight-from-the-shoulder views of what you should, and shouldn’t, do.

dutch-uncle-image-of-a-stern-uncleConsequently, true “Dutch uncle” advice is often unwelcome.  Some people don’t want a “Dutch uncle” telling them what to do — they want somebody to give them a sympathetic hug and a piece of chocolate and tell them they’ve just had some bad luck and things are bound to turn out for the better, eventually.  Rather than hearing from the “Dutch uncle,” they’d rather hear from, say, the “hippie aunt.”

JP Morgan Chase learned this recently when it gave some classic “Dutch uncle” advice on its Twitter feed.  The bank evidently offers a weekly “#MondayMotivation” tweet, and one of the recent tweets was framed as a conversation where the customer asks “Why is my balance so low?” and the customer’s bank account responds:  “make coffee at home…eat the food that’s already in the fridge…you don’t need a cab, it’s only three blocks.”  In short, if you want to have more money in your bank account, pay attention to what you’re spending your money on and consider whether you really need to buy that caramel-drizzled frappacino latte grande every day.

Not surprisingly, JP Morgan Chase’s “Dutch uncle” advice was met with a hail of dead cats.  Some elected officials responded that JP Morgan Chase should pay its workers more, and argued that the problem isn’t frivolous spending, it’s what workers are making in the first place.  Other people argued that it isn’t about individual personal responsibility, it’s about the “hollowing out of the middle class,” and that Chase’s unwanted advice shows “stunning tone-deafness about the economic realities facing ordinary Americans” — even though the economy seems to be doing pretty well right now.   Others used the tweet as a chance to point out that Chase charges its customers high fees, and that Chase got a bailout from taxpayers during the Great Recession because of its own financial misadventures.  Only a few people rose to the defense of Chase’s advice, and Chase deleted the tweet after a few hours.

These days, apparently, nobody wants to hear that they have some degree of control over their own lives, or that their personal decisions may have produced their current predicament, because it’s easier to just blame somebody or something else.  Politicians are happy to promote the notion of helpless victimhood, because it promotes the perception that only political leaders can actually create change that affect the lives of individual Americans.

In our current culture, “Dutch uncles” aren’t welcome.  Say hello to the hippie aunt.

How Old Is “Too Old”?

This week former Vice President Joe Biden formally declared his candidacy for the Democratic presidential nomination.  He joins a very crowded field of politicians vying for the chance to square off against President Donald Trump in 2020.

bernie-and-joe-like-donald-trumpJoe Biden is 76 years old.  He was born on November 20, 1942; if he were to be elected, he would be 77 on Election Day, and 78 when he takes office.  Bernie Sanders, who is another candidate for the Democratic nomination, is 77 years old and, being born on September 8, 1941, would be 79 on Election Day in 2020.  If either of those candidates won, they would easily set a new record for the oldest person to be newly elected to the presidency — a record now held by the current occupant of the White House, who was a mere 70 when he was inaugurated.  (The oldest President to be elected, period, was Ronald Reagan, who was 73 when he won reelection in a landslide in 1984 — a record that would be obliterated if the 2020 race turned out to be either Trump-Biden or Trump-Sanders.)

There have been some old Presidents in American history — some good, some not so much — and clearly people’s perceptions of what it means to be old in our current day are changing.  As average life spans increase and medical care, diet, fitness, and general attention to health improve, some people argue that aging is really all about a state of mind, and “60 is the new 40.”  And no doubt Biden and Sanders will produce medical reports that show that they are healthy, active, vibrant, and ready to handle the demands of an incredibly taxing job.

Still, Biden and Sanders are really pushing the presidential age envelope into uncharted territory.  How will people react when, as Election Day nears, they really ponder the prospect of an 80-year-old President?  No doubt people will be looking carefully at all three of the septuagenarians — Trump, Biden, and Sanders — for signs of age-related physical feebleness and mental slippage.  Age is something that can’t be hidden, and one serious memory glitch during a debate could be all she wrote for a candidacy.

I don’t think it is improperly ageist to wonder about how age affects fitness for the Oval Office.  In 2020, we may be answering the question:  “How old is too old?”

The Boy Who Cried “Regulation”

Recently Facebook’s billionaire CEO, Mark Zuckerberg, published an op-ed piece in the Washington Post that called for “a more active role for governments and regulators” to establish “new rules” for the internet.  The op-ed has provoked lots of comment.

facebook-ceo-mark-zuckerberg-testifies-before-us-congress-highlightsZuckerberg’s op-ed piece begins:  “Technology is a major part of our lives, and companies such as Facebook have immense responsibilities. Every day, we make decisions about what speech is harmful, what constitutes political advertising, and how to prevent sophisticated cyberattacks. These are important for keeping our community safe. But if we were starting from scratch, we wouldn’t ask companies to make these judgments alone.”  He says he agrees with people who say Facebook has “too much power over speech” and argues that government regulation is needed in four area — harmful content, election integrity, privacy and data portability.  Zuckerberg adds:  “By updating the rules for the Internet, we can preserve what’s best about it — the freedom for people to express themselves and for entrepreneurs to build new things — while also protecting society from broader harms.”

Zuckerberg’s article, while couched as a call for regulation, reads like a PR piece for Facebook; it argues, among other things, that Facebook has developed “advanced systems for finding harmful content, stopping election interference and making ads more transparent” and has taken other steps in the four areas.

It’s safe to say that Zuckerberg’s clarion call has been viewed with significant skepticism in the United States and abroad.  An article in The Hill says that “[r]egulators, lawmakers and activists who have grown wary of Facebook saw Zuckerberg’s move less as a mea culpa and more as an effort to shape future regulations in his favor,” and quotes, for example, a UK regulator who says that if Zuckerberg really believes what he has written he can start by dropping an appeal of a $560,000 fine the UK imposed for Facebook’s activities in connection with the Cambridge Analytica scandal.  Others are leery of inviting the government to regulate on-line speech, and believe that Facebook — having thrived and made millions in a regulation-free environment — now wants to see regulations imposed in order to complicate and thwart efforts by new competitors to grab some of Facebook’s social media market share.

The reaction to Zuckerberg’s op-ed piece illustrates what happens when you have frittered away your credibility.  Facebook’s history doesn’t exactly fill people with confidence that the company has users’ privacy and best interests at heart; too often, the company appears to have placed generating revenue above user concerns and data protection.  I’m inherently dubious of any governmental action that touches free speech, and large-scale regulatory efforts often impose staggering costs without providing much benefit — but even if you think such efforts are a good idea, Zuckerberg is exactly the wrong person to float such proposals.  He’s like the boy who cried wolf.